Northern neighbour's meat market pricing out Australians exporters

Nobody notices as the first steer is led quietly into the killing box. There is no struggling and no lowing.

The first sound is the sudden pneumatic whoosh of a stunning device, then a clunk as the side of the box opens and the Brahman beast falls unconscious to the floor.

In one smooth, “halal” sweep of the knife, an abattoir worker all-but decapitates him. As his life-blood gushes into a drain and his head and hoofs are removed, this fine, 450-kilogram creature, the pride of northern Australia, is turned in a few moments from animal to carcass.

By the time he leaves 20 minutes later on the backs of strong young men, he is meat.

This is the Agrisatwa abattoir in Legok, an outer suburb of Jakarta, the capital of Indonesia — a country which most Australians consider to be a special kind of hell for cattle.

But changes made to abattoirs in the wake of the shocking animal welfare revelations last year have, according to Australian meat exporters, made many of them into state-of-the-art institutions.

The workers here extol the system — it's quicker and quieter and the number of worker injuries has fallen as they no longer need to wrestle big Australian cattle to the ground.

But while slaughter practices have been surprisingly swift to change, the live-cattle scare is still sending shockwaves through the Indonesian market for beef.

Shortly after Australia suspended exports last year, the Indonesian government imposed strict quotas on imports.

In the lead-up to Lebaran - also known as Eid al-Fitr, the feasting that accompanies the end of Ramadan next week - the feedlots which supply the abattoirs are only half full, even as demand is skyrocketing. The price of beef at the local “wet markets” has jumped by 50 per cent or more, and shortages are appearing.

“Of course it's difficult,” says Riswani, an “ibu-rumah”, or housewife, shopping at the Pasar Modern market in Bumi Serpong Darmai, an outer suburb of the capital.

Here shoppers browse unrefrigerated aisles of Australian beef which, just six hours earlier walked independently to its doom. Some cuts sell for 98,000 rupiah, or $10.50, a kilo. Even the offal, usually the cheapest cut, has tripled in price recently.

Ibu Roswani will buy it anyway.

“Harus! Harus! (We must!),” she says. “It's compulsory to have beef rending and beef curry, that is the Indonesian way … in Lebaran days we buy more beef, three to four kilograms, because there is more family coming.”

It's hard to disentangle the price rise from the seasonal increase which Ibu Riswani sees every year at Lebaran. But industry figures insist the price will stay high after the holiday because there is simply not enough cattle available for slaughter.

“We are 40 per cent short,” says Gunadi, a manager for meat company Agro Giri Perkasa, as he oversees his business at the Karawaci abattoir in suburban Tangerang.

By next year's holiday, a year away, he says only by God's will, “Inshallah”, will there be sufficient supply.

Indonesian Agriculture Minister Suswono introduced the strict quotas last year to achieve Indonesia's long-held ambition of being self-sufficient in beef by 2014. He does not say it, but many believe he was spurred on by the offence caused when his Australian counterpart, Joe Ludwig, stopped the live trade without notice in July last year.

For Indonesian consumers the consequence is a beef famine, but across the water in Australia, it's the opposite.

Ian McBean of Bonalbo Station, 250 kilometres south of Darwin, has nearly 300 cattle that he doesn't know what to do with.

They weigh more than the maximum 350 kilograms for export and so remain on the farm at his own cost. The cost of carting cattle south or east for slaughter is uneconomical, but some farmers pay more than they earn — "sending a cheque for the freight" — just to get the animals off the land.

Mr McBean will celebrate 60 years working cattle in the territory this Christmas but sees a dimmer future for his successors. Property prices are dropping, staff are being laid off — the industry is a large employer of indigenous people — and families are worried about their long-term future.

“The younger generation can't see much light at the end of the tunnel. And just a few years ago it looked so bright," Mr McBean says.

"We have done all we can with encouraging Indonesia to get back on board," Mr Muldoon says.

Now, farmers say, it is up to the Australian government to get serious about improving relations with Indonesia.

Australian meat has a ready market in Indonesia. Stallholder Gofur says “it is better quality and customers want it". As Dayan Antoni, of feedlot giant Santori, says, “There are 230 million people in Indonesia and they need to be fed.”

Consistent with the Indonesian government's self-sufficiency drive, local stock are now replacing exports, and make up about 83 per cent of the market here.

But the whisper around the slaughterhouses is that local farmers are making up the shortfall by selling their breeding cows, making both a literal and figurative killing while prices are high. Talk is that fully 85 per cent of the local cattle going under the knife are fertile females.

This is not only illegal, but will reduce the breeding herd, making the government's target of self-sufficiency by 2014 even more remote.

Smuggled beef, mostly comprised of much cheaper buffalo, is also flooding in from India via Malaysia, often by fishermen, prompting a rare tirade on Monday from Indonesian President Susilo Bambang Yudhoyono.

Indonesians eat about two kilograms of beef per person, compared to 36 kilograms for Australians. This is expected to grow as Indonesians become more wealthy.

“When the economic and social status rises, they will buy a car, or a motorbike … a [mobile] phone, and consume beef. That's the status symbol,” says Antoni, who is also also spokesman for the feedlot industry association, Apfindo.

There was no way the local industry could meet demand in forthcoming years, he says — a point he has also made to the Indonesian government.

“If they are sensible enough to really understand the situation, they should make some changes in their policy, he says.

Yes, but would they?

“We have faith.”

Richard Willingham travelled to Indonesia and the Northern Territory as a guest of the NT Cattlemen's Association.